On the hourly chart, the GBP/USD pair attempted to start rising on Tuesday, but the bulls' attacks ended before they had really begun. Today, the pound made another attempt to consolidate above the 76.4% Fibonacci level at 1.3489, but was unsuccessful again. Thus, a rebound from the 1.3489 level allows us to expect a continuation of the decline toward the 1.3447–1.3454 support level. Consolidation above 1.3489 would allow traders to expect some growth toward the 1.3526 and 1.3556 levels.

The market situation has changed to bearish. The latest completed upward wave failed to break the previous peak, while the new downward wave broke the previous low. Thus, the bears have now taken control of the initiative. I am not sure they will be able to launch a full-scale advance, as the FOMC monetary policy tightening scheduled for Wednesday has effectively already been priced in—the dollar has been rising for four consecutive days, while the Bank of England may support the British pound tomorrow.

In the UK, the August inflation report was released this morning, which could have prompted the Bank of England to begin tightening monetary policy earlier than expected. However, the inflation report turned out to be neutral, with its figures exactly matching the forecasts of traders and experts. The Consumer Price Index rose to 3.1% year-on-year, while the core index remained at 2.6% year-on-year. Although headline inflation did accelerate by 0.2%, this may not be enough for the Bank of England to adopt a more hawkish stance tomorrow. Most likely, the number of votes in favor of an interest rate hike will not exceed three, which the market has already priced in. At recent meetings of the British central bank, two or three of its policymakers have consistently voted for tighter policy but have always found themselves in the minority. The situation is unlikely to change on Thursday, so the pound will not be able to count on support from the regulator. If a larger number of policymakers vote for a rate hike, the bulls may launch an attack.

On the 4-hour chart, GBP/USD has reversed in favor of the US dollar and declined toward the 1.3467–1.3482 support level. Consolidation below the 1.3467–1.3482 level will increase the likelihood of a continued decline toward the 50.0% Fibonacci level at 1.3409. A rebound from the 1.3467–1.3482 level would allow us to expect some growth toward the 23.6% Fibonacci level at 1.3538. A bullish divergence is developing on the CCI indicator, increasing the likelihood of a rebound.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category became more bearish over the latest reporting week. The number of Long positions held by speculators decreased by 11,866, while the number of Short positions decreased by 2,605. The current gap between the number of Long and Short positions is effectively 74,000 versus 132,000. The gap and the bears' advantage are gradually narrowing, but the bears still retain a substantial advantage. Previously, the bears' dominance was not in question, but this is now changing because the fundamental backdrop has changed.

I still do not believe in a bearish trend for the pound, but in the near term, everything will depend on Trump's trade policy, the monetary policy of the Fed and the Bank of England, as well as the duration, scale, and consequences of the war in the Middle East. In recent months, the market has adjusted its expectations toward peace, but negotiations between Iran and the US failed before they had really begun. And there is no guarantee that they will resume in the near future. The Fed's position on monetary policy remains contradictory.

US and UK Economic Calendar:

• UK – Consumer Price Index (06:00 UTC).
• US – Change in Retail Sales (12:30 UTC).
• US – FOMC Interest Rate Decision (18:00 UTC).
• US – FOMC Interest Rate Dot Plot (18:00 UTC).
• US – FOMC Press Conference (18:30 UTC).

On September 16, the economic calendar contains five entries, all of which can be considered important except for the US retail sales report. The impact of the economic backdrop on market sentiment on Wednesday may be strong throughout the day.

GBP/USD Forecast and Trading Tips:

Selling the pair was possible following a rebound from the 1.3526 level on the hourly chart, with targets at 1.3489 and 1.3454. The first target was reached. The trades can be closed. Buying is possible following a rebound from the 1.3447–1.3454 level, with targets at 1.3526 and 1.3556.

The Fibonacci level grids are drawn from 1.3557–1.3272 on the hourly chart and from 1.3158–1.3655 on the 4-hour chart.